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The Prospect Resources Ltd (ASX: PSC) share price is in negative territory in early afternoon trade. This comes despite the company announcing the completion of a strongly supported placement.

At the time of writing, the lithium producer’s shares are tumbling 8.1% to 17 cents.

Completed placement

Investors are sending Prospect shares lower as they come to grip with impending share dilution from the company.

According to its release, Prospect has received subscriptions to raise $6.5 million from institutional and sophisticated investors. Approximately 41.9 million new ordinary shares will be allocated at an issue price of 15.5 cents apiece. This represents a discount of 16.2% on Tuesday’s closing price of 18.5 cents before the trading halt came into effect.

Prospect highlighted that the strong support came from its largest shareholder, among new international and domestic institutions. The board and the management team also tapped into the company’s register.

The funds raised will be used to complete the acquisition of a further 17% interest in the Arcadia Lithium Project. This will increase Prospect’s holding to a total of 87%. In addition, the remaining monies will be used to advance the development funding process and for capital working purposes.

Settlement of the new shares is expected to take place on 23 April 2021.

Prospect managing director Sam Hosack commented:

The need for further, high-quality lithium projects to be developed in the face of a looming critical shortage in lithium-ion battery materials is becoming increasingly evident to industry and investment markets.

Arcadia is in the unique position of being the only lithium deposit that is expected to operate in the lowest cost quartile via production of both low iron spodumene concentrate for the lithium-ion battery market and high purity petalite lithium concentrate for the glass and ceramics markets.

Prospect share price snapshot

Over the past 12 months, the Prospect share price has accelerated by 70% but is flat year to date. The company’s shares reached a 52-week high of 27.5 cents in August last year, before moving in circles.

Based on the current share price, Prospect presides a market capitalisation of roughly $56.4 million, with 332 million shares outstanding.

More reading

• Why brokers are bullish on the Qantas (ASX:QAN) share price
• Can the Flight Centre (ASX:FLT) share price continue to rise?
• 2 outstanding tech ETFs for ASX investors to buy this month
• Jeff Bezos just revealed Amazon Prime’s latest subscriber number — and it’s a doozy
• Why the Neometals (ASX:NMT) share price has surged to a 52-week high

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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It often feels like one step forward and two steps back for the Qantas Airways Limited (ASX: QAN) share price.

This week alone, investors had to juggle concerns that international travel is likely to remain limited until 2024, the cancellation of the AstraZeneca vaccine for under-50s and an upbeat business update from Qantas. 

While it might be a tug-of-war between the bulls and bears for where the Qantas share price will go next, brokers believe the company’s shares are in a position to outperform. 

Qantas business getting back on its feet

Yesterday, Qantas provided a number of updates regarding the ramp-up of its services. To recap its update, the company estimates that domestic travel can reach 80% of pre-COVID capacity in Q4 FY21. Looking ahead, it believes domestic travel levels could reach more than 90% by 4Q21 and 107% in FY22. 

To meet increased demand for domestic travel, Jetstar will deploy six Airbus A320 aircraft on loan from Jetstar Japan. It will also redeploy up to five of its Boeing 787-8 aircraft, usually flown on international routes, to the domestic market from mid-year until international flying returns. Overall, 90% of the group’s aircraft will be active in the fourth quarter, up from 25% during mid-2020. 

Brokers are bullish on the Qantas share price 

Macquarie has come out with an outperform rating and a $6.45 target price for Qantas shares. The broker expects FY22 domestic capacity to be approximately 110% of pre-COVID levels, supported by pent-up leisure demand, the government’s $1.2 billion aviation support package and recovering corporate travel volumes. 

Despite warnings that international travel could be off the cards until 2024, Qantas is optimistic about international borders re-opening from October 2021. 

The broker continues to monitor the COVID vaccine roll-outs in key destinations like the United States and Singapore that formed a big proportion of FY19 available seat kilometres. 

Similarly, Morgan Stanley is overweight on Qantas shares with a $5.90 target price. The broker believes the recovery in domestic capacity will allow for an organic repair to take place in its balance sheet but with a relatively small impact on profitability. Morgan Stanley says this will be supported by strong leisure figures assisted by government incentives and an early recovery in corporate travel. 

More reading

• Can the Flight Centre (ASX:FLT) share price continue to rise?
• Brokers name 3 ASX shares to buy now
• Qantas (ASX:QAN) share price edges higher on business update
• Flight Centre (ASX:FLT) share price falls despite border reopening hints
• Trashed COVID-19 vaccine targets hit ASX travel shares

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Flight Centre Travel Group Ltd (ASX: FLT) share price is edging higher on Friday.

In afternoon trade, the travel agent’s shares are up slightly to $17.78.

This means the Flight Centre share price is now up approximately 37% over the last six months.

Can the Flight Centre share price keep in climbing?

The good news for investors is that it may not be too late to buy Flight Centre’s shares.

According to a note out of Macquarie Group Ltd (ASX: MQG), its analysts have retained their outperform rating and $20.00 price target on its shares.

This price target implies potential upside of approximately 8% for its shares over the next 12 months.

What did Macquarie say?

Macquarie has been looking into the travel market and notes that progress is starting to emerge in respect to the restarting of international travel.

It believes this is a big positive for Flight Centre. Particularly given that the company’s international bookings prior to the COVID-19 pandemic accounted for roughly half of its revenue.

In addition to this, Macquarie was pleased with the response to the Australia-New Zealand travel bubble. It notes that airlines have reported that bookings have been strong since the bubble announcement.

Looking ahead, Macquarie is forecasting Flight Centre’s total transaction value (TTV) to reach 50% of pre-COVID levels in FY 2022. After which, it expects it to grow to 85% of pre-COVID levels by FY 2024.

What about other travel shares?

The broker is also bullish on Qantas Airways Limited (ASX: QAN) shares. This morning the broker put a buy rating and $6.45 price target on its shares.

With the Qantas share price currently fetching $5.13, this price target implies potential upside of almost 26% over the next 12 months.

Macquarie believes that a positive travel outlook and the structural business improvements it made during the pandemic will eventually lead to higher levels of profitability.

All in all, Macquarie appears confident both the Flight Centre share price and the Qantas share price can continue their ascent during 2021.

More reading

• Brokers name 3 ASX shares to buy now
• Qantas (ASX:QAN) share price edges higher on business update
• Flight Centre (ASX:FLT) share price falls despite border reopening hints
• Trashed COVID-19 vaccine targets hit ASX travel shares
• These are the 10 most shorted shares on the ASX

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Flight Centre Travel Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Exchange traded funds (ETFs) continue to grow in popularity with Australian investors.

In fact, local investors are now estimated to have invested a whopping $100 billion into them, according to the AFR.

And it isn’t hard to see why. Through a single investment, ETFs allow investors to invest in a large number of shares that they wouldn’t ordinarily have access to.

But which ETFs should you add to your portfolio? Two quality options to consider are listed below:

BetaShares Asia Technology Tigers ETF (ASX: ASIA)

The first ETF to look at is the BetaShares Asia Technology Tigers ETF. This popular ETF gives investors exposure to a number of the biggest tech shares in the Asia market.

This is certainly a great space to be in. Technological adoption in Asia is surpassing the West and is expected to underpin strong growth over the next decade.

The BetaShares Asia Technology Tigers ETF is currently invested in a total of 50 companies. This includes Alibaba, Baidu, JD.com, NetEase, and Tencent.

The latter is a multinational technology conglomerate and one of the largest companies in the world. Its communication and social platforms, Weixin (WeChat) and QQ, connect over a billion users with each other and with digital content and services.

VanEck Vectors Video Gaming and eSports ETF (ASX: ESPO)

Another ETF to consider is the VanEck Vectors Video Gaming and eSports ETF. This ETF gives investors exposure to a portfolio of the largest companies involved in video game development, eSports, and related hardware and software globally.

VanEck notes that these companies are in a position to benefit from the increasing popularity of video games and eSports. Furthermore, it notes that the fund gives investors the option to diversify their portfolio by providing opportunities away from tech giants Apple, Amazon, Facebook, Google and Microsoft.

Among its holdings are graphics processing units (GPU) producer Nvidia, games developer Take-Two Interactive (GTA, Red Dead), Electronic Arts (FIFA, Sims, Apex Legends), and Activision Blizzard (Call of Duty).

More reading

• 3 high quality ETFs for ASX investors to buy
• 2 highly rated ASX tech shares to buy this month
• Love tech shares? This ASX ETF is a great buy today
• 2 compelling ASX shares to buy in April 2021
• Is this the best ETF that ASX investors can buy today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended BetaShares Asia Technology Tigers ETF. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

It took 13 years for Amazon (NASDAQ: AMZN) to add 100 million customers to its Prime customer loyalty program, but it took just 3 years to add the next 100 million.

In his annual letter to shareholders, his final as CEO of the e-commerce giant, Jeff Bezos said Amazon Prime has surpassed 200 million subscribers globally. What’s even more impressive is that Amazon has added more than 50 million new members since January 2020, when Bezos announced the company had exceeded 150 million Prime members.

Amazon announced earlier this year that Bezos will step down as CEO and transition to the role of executive chair, effective in the third quarter of 2021. He used the shareholder letter to provide some insight into his plans. In his new role, Bezos said he will “focus on new initiatives,” without providing specifics. “I’m an inventor. It’s what I enjoy the most and what I do best. It’s where I create the most value.”

He also pushed back against the perception of downtrodden Amazon employees, as they’re frequently portrayed in the media. “When we survey fulfillment center employees, 94% say they would recommend Amazon to a friend as a place to work,” he said. However, in a nod to the recent lopsided vote against a union at an Alabama warehouse, Bezos said, “We need to do a better job for our employees.”

Bezos also shared a letter from customers who originally purchased two shares of Amazon stock for their son’s birthday back in 1997, saying it was “all we could afford at the time.” The letter writers, identified as Mary and Larry, recounted the various stock splits that eventually turned those two shares into 24. We don’t know the exact date of the purchase, since it was redacted, but Amazon shares sold for a split-adjusted high of $5.40 in late 1997.

At current prices, the total value of those 24 shares is more than $80,000, illustrating the power of time for investors.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Danny Vena owns shares of Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends the following options: long January 2022 $1920.0 calls on Amazon and short January 2022 $1940.0 calls on Amazon. The Motley Fool has a disclosure policy.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• Better buy: Microsoft vs. Alphabet
• Analyst: Amazon still has a 70% upside potential over three years
• The stock that I’d hold for the next 5 years: fundie
• Tesla and Palantir were some of the most popular US shares last week
• Better buy: Amazon vs. GameStop

Danny Vena owns shares of Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Amazon and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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The Neometals Ltd (ASX: NMT) share price is on the charge today. Shares in the Aussie miner have rocketed 7.9% higher at the time of writing to 48 cents per share – a new 52-week high.

Why is the Neometals share price surging higher?

The big news today was a new agreement to sell titanium to a Chinese titanium slag producer. Neometals has signed a memorandum of understanding (MOU) with Jiuxing Titanium Materials (Liaonging) Co. Ltd.

That news has helped propel the Neometals share price to a new 52-week high during Friday trading. According to the release, the MOU contains an evaluation framework and key commercial terms.

That MOU will help the parties work towards a binding formal offtake agreement for the supply of 800,000 dry tonnes per annum (dtpa) of mixed gravity concentrate or 500,000 dtpa of ilmenite and 275,000 dtpa of iron-vanadium concentrate for a 5-year period on a take-or-pay basis from first production.

It’s a significant agreement that centres on Neometals’ Barrambie Titanium and Vanadium Project. Neometals says that the Barrambie site is the most advanced, undeveloped hard-rock titanium mineral resource in the country.

The Neometals share price is climbing on the back of the update which included a set of next steps. Neometals will mine a 250-tonne bulk sample from Barrambie and transport mixed concentrate to China.

Jiuxing will blend and batch smelt 100 tonnes in its commercial titanium smelter with negotiation of full-form offtake agreements and BOO/T agreements.

Foolish takeaway

The Neometals share price has charged higher to a new 52-week high in early afternoon trade. That comes on the back of a significant milestone deal for its Barrambie Project.

Today’s MOU announcement brings Neometals one step closer to a major, binding supply agreement to a leading Chinese titanium producer.

That has buoyed investors spirits and pushed shares in the Aussie mining group higher.

More reading

• Why the Neometals (ASX:NMT) share price is shooting 8% higher
• ASX lithium shares are surging across the board. Here’s why

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Monadelphous Group Limited (ASX: MND) share price surged to a more than one-month high as the so-called “Rio Tinto Limited (ASX: RIO) discount” was unwound.

The Monadelphous share price surged 5.7% to $11.40 during lunch time trade, making it the best performer on the S&P/ASX 200 Index (Index:^AXJO).

In contrast, the Beach Energy Ltd (ASX: BPT) share price is in second place with a 4.6% increase and Altium Limited (ASX: ALU) share price is third with a 3.9% gain.

Monadelphous share price trades without Rio Tinto discount

Investors got excited with the Monadelphous share price after management said it was reached an out-of-court settlement with its client Rio Tinto.

The legal threat was a big overhang on the Monadelphous share price since for nearly a year. An adverse court ruling against the engineering contractor could have brought the group to its knees.

Rio Tinto launched court proceedings against Monadelphous in August last year. The mining giant was claiming $493 million in damages during a fire at its iron ore processing facility at Cape Lambert.

Large liability that’s hard to price

Rio Tinto blamed Monadelphous for the fire, which happened during a maintenance shutdown that was managed by Monadelphous.

While claims tend to be exaggerated ahead of a court battle, Monadelphous would have been in deep trouble even if Rio Tinto won half of what it wanted.

After all, the contactor’s FY20 earnings before interest, tax, depreciation and amortisation (EBITDA) only amounted to around $90 million.

Monadelphous’ settlement provides more than one tailwind

While Monadelphous wouldn’t say how much it had to pay to keep Rio Tinto at bay, it did say that the settlement is covered by the proceeds of insurance.

Both parties now consider the matter resolved.

That’s good news. But what’s also a big positive is that Monadelphous appears to have managed to keep its working relationship with Rio Tinto.

“Monadelphous highly values its long-term business relationship with Rio Tinto,” said the contractor in its ASX statement.

“[Monadelphous] is pleased that this matter has been resolved amicably, and is looking forward to continuing to work closely with this very important customer into the future.”

Is the Monadelphous share price about to re-rate?

I won’t be surprised to see the Monadelphous share price run higher from here. The ASX share has underperformed the market over the past year as it’s barely above breakeven.

In contrast, ASX miners have soared. The Fortescue Metals Group Limited (ASX: FMG) share price surged 82% over the period, while the BHP Group Ltd (ASX: BHP) share price added 51% and Rio Tinto increased by 31%.

There are worries that ASX mining shares are starting to look fully valued. This means laggards that are exposed to high-flying commodity prices could be next to fire up.

Monadelphous share holders like myself will be keeping our fingers crossed!

More reading

• Why you should buy these 2 defensive ASX shares today
• Why Eagers Auto, Mayne Pharma, Monadelphous, & Newcrest are pushing higher
• Eagers Automotive (ASX:APE) share price edges higher on trading update
• ASX 200 down 0.2%: Origin sinks on earnings downgrade, gold miners charge higher
• 5 things to watch on the ASX 200 on Friday

Brendon Lau owns shares of Beach Energy Limited, BHP Billiton Limited, Monadelphous Group Limited and Rio Tinto Ltd. Connect with me on Twitter @brenlau.

The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Altium. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Dogecoin (CRYPTO: DOGE) price is rocketing, up 90% over the past 24 hours alone.

At the current 24 cents, Dogecoin now ranks as the 8th largest cryptocurrency in existence, with a market cap of US$23.4 billion (AU$30.4 billion).

That’s according to data from CoinMarketCap, which also tells me that, while Dogecoin doesn’t trade on the newly listed Coinbase Global Inc (NASDAQ: COIN), you can turn to crypto exchanges Binance, Huobi Global, OKEx, FTX, or CoinTiger, among others.

Why is the Dogecoin price heading for the moon?

Back on 1 January this year, you could have picked up a single Dogecoin for less than half a cent. Or 0.469 cents, to be precise.

At the time of writing – and it’s changing almost minute by minute – the Dogecoin price is 23.8 cents. That’s a gain of – wait for it – 4,996% since we awoke to celebrate the new year.

The Bitcoin price, by comparison, is up a more sedate 118% so far in 2021.

So, what’s driving the Dogecoin price to the moon?

Certainly, Dogecoin has benefited from the broader cryptocurrency bull run of late, which have driven Bitcoin and Ether (the number 2 crypto by market cap) to new record highs as well.

That bull run can be attributed to a wider involvement in cryptos by institutional investors, alongside growing investor unease that central bank and government stimulus efforts will see a surge in inflation in global fiat currencies.

On the institutional side, this week’s listing of crypto exchange Coinbase on the tech-heavy Nasdaq offered a boost for most of the leading digital assets.

The billionaires’ boost

And let’s not forget Elon Musk.

The Tesla Inc (NASDAQ: TSLA) founder earlier this year was credited for aiding Bitcoin’s price rise when he announced that Tesla would accept Bitcoin for its vehicles. And that the company would hold onto those Bitcoin rather than exchanging them for dollars.

Musk is also credited with providing some strong tailwinds for the Dogecoin price.

On 1 April (yes, April Fool’s Day), the Tesla billionaire tweeted “Doge Barking at the Moon”, along with an image of just that. The implication was widely believed to mean that Musk expected the Dogecoin price to rocket.

As indeed it has.

Speaking of billionaires, let’s not forget Mark Cuban. He’s the owner of the US basketball team, the Dallas Mavericks. His NBA team began accepting Dogecoin for payments last month.

On Wednesday, 14 April, Cuban looks to have stirred the coals under the Dogecoin price when he tweeted:

FYI, the Mavs sales in dogecoin have increase 550pct over the past month. We have now sold more than 122k in Doge in merchandise! We will never sell 1 single Doge ever. So keep buying.

And if the Dogecoin price needed even more institutional support, it got it from Conagra Brands Inc‘s (NYSE: CAG), Slim Jim brand.

As CoinDesk reports:

Smoked meat stick vendor Slim Jim has an actual official dogecoin strategy…

The social media-savvy snack food saw its Twitter follower count increase 160% and tweet impressions soar to the moon (35 million impressions in 25 days) after it began engaging in Shiba Inu meme coin content last quarter, according to the CEO of parent company Conagra Brands.

“We’ve seen a marked uptick in audience interaction, including direct engagement and advocacy from the person [who] created dogecoin,” CEO Sean Connolly said on Conagra’s April 8 earnings call. 

A bit of history

Dogecoin was created by the US’ Billy Markus and Australia’s Jackson Palmer. The company emerged from (or was forked from, in crypto parlance) Litecoin in 2013. Based on a dog meme, they intended the altcoin to be a light-hearted version of the more serious cryptos, like Bitcoin.

Unlike Bitcoin, which is capped at a total final supply of 21 million once the last virtual coins have been mined, the Dogecoin supply is uncapped. That means potentially an unlimited amount of Dogecoin could be mined.

What that will mean for the Dogecoin price longer-term, remains to be seen.

More reading

• Do you think the Bitcoin price is a bubble? Read this
• Why Cryptocurrency stocks like Marathon Digital and Riot Blockchain crashed Today
• Cathie Wood ARK funds buy 750,000 Coinbase shares after IPO
• Coinbase (NASDAQ:COIN) shares pop and drop in debut
• The Coinbase (NASDAQ:COIN) IPO price has been announced

Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and recommends Bitcoin and Tesla. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Douugh Ltd (ASX: DOU) share price opened 7% higher to 18 cents this morning, following an announcement about the company’s international expansion into Australia with its acquisition of Goodments Pty Ltd.

In early afternoon trade, the Douugh share price has pulled back slightly to be up by 6.06%.

What’s driving the Douugh share price?

Today, the Douugh share price opened higher after the company announced that its recent Goodments acquisition will re-launch its trading platform in Australia to drive customer and revenue growth in the short-term. The company will then consolidate the Goodments investing app into the Douugh app in partnership with its banking-as-a-service partner, RAB. 

Douugh plans to leverage the heightened level of interest in the share market from millennials and Gen-Z and offer the demographic a broader wealth management offering, which will include retirement, single stocks/exchange-traded funds (ETFs) and crypto investing.

Acquiring Goodments to fast-track investing offerings 

Founded in 2017, Goodments is an emerging playing in the responsible investing space, building customer-centric products that match sustainability-minded people with investments that align with their environment, social and ethical values. 

The company is a regulated Australian Financial Services Licence (AFSL) holder that has strong relationships with financial institutions, brokers and key plays in the investment industry.

The Goodments acquisition has allowed Douugh to accelerate a number of development pathways to drive customer growth and revenues in both the US and Australian markets. 

In terms of the US market, the acquisition will help fast-track the launch of the Douugh Wealth offering in the US, creating a launchpad to drive revenues through the introduction of a monthly subscription. 

Commentary from management 

Douugh’s Founder and CEO Andy Taylor commented on the acquisition: 

The acquisition of AFSL licensed Goodments and the recent award of our RIA licence in the US allows for the rollout of Wealth Jars. With this feature we can target customers in the investing space who are currently using platforms like Betterment, Acorns and Stash with a holistic solution for their money management, focused on growing automated long-term wealth. This should result in larger average deposit balances being received and ultimately a higher penetration of customers paying in their salaries, which is our north star metric. 

He added:

Goodments are currently offering their more than 13,000 customers access to a range of fractionalised US stocks like Tesla, Virgin Galactic, Nike, Square and Apple. As well as high performing ETFs from companies like Ark Invest, Vanguard and Blackrock. 

In the current climate, many millennials and Gen Z’s are gravitating in record numbers to the sharemarket to help them grow their savings and build wealth. 

More reading

• Zip (ASX:Z1P) eyes potential stock and crypto trading services
• Douugh (ASX:DOU) share price races 6% on performance update
• The Douugh (ASX:DOU) share price is up 12% this morning. Here’s why
• Douugh (ASX:DOU) share price dips on remedial action completion

Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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With the S&P/ASX 200 Index (ASX: XJO) climbing dramatically this week to a new post-COVID high, it can be tempting to think these sorts of lucrative market conditions can last forever. Alas, this has never been, and will never be, the case. The markets are a volatile beast, and can both giveth and taketh away. While some investors embrace this inherent volatility as a useful way to buy shares on the cheap, it can be downright scary, and off-putting, for many others. That’s where defensive ASX shares can be useful.

There are defensive ASX shares out there that have the potential to increase the stability and decrease the volatility of one’s portfolio if that’s an important consideration for you. Here are two such ideas today:

iShares Global Consumer Staples ETF (ASX: IXI)

This exchange-traded fund (ETF) from iShares only invests in a basket of global companies in the consumer staples sector. Consumer staples is an investing term that describes all of the goods and services we all tend to need, rather than want. This includes food, drinks, household essentials like laundry powder, soap and dishwashing liquid, and vices like alcohol and tobacco.

The beauty of this sector is that it tends to be almost completely immune from economic conditions. We all need to eat, drink and run our houses in good times and bad. And that makes these companies extremely defensive investments. Some of this ETF’s largest holdings include Coca-Cola Co (NYSE: KO), Procter & Gamble Co (NYSE: PG), Unilever plc (LON: ULVR) and McDonald’s Corp (NYSE: MCD). Even our own Woolworths Group Ltd (ASX: WOW) and Coles Group Ltd (ASX: COL) feature. 

This ETF has returned an average of 12.11% per annum over the past 10 years. It charges a management fee of 0.46% per year.

Magellan Infrastructure Fund (ASX: MICH)

This listed fund is run by Magellan Financial Group Ltd (ASX: MFG). Magellan is one of the most popular fund managers in Australia. This fund focuses entirely on infrastructure. It invests in companies with large, stable infrastructure investments like toll roads, ports, airports, energy infrastructure and power generation and transmission. Like consumer staples, demand for these assets tends to be very consistent and inelastic. That means they tend to generate cash flows in good times and bad, making them very useful defensive investments.

Magellan Infrastructure Fund holds companies like Atmos Energy Corporation (NYSE: ATO), Enbridge Inc (NYSE: ENB) and our own Transurban Group (ASX: TCL).

This defensive ASX share has returned an average of 5.81% per annum since its inception in 2016. It charges a management fee of 1.05% per year.

More reading

• Eagers Automotive (ASX:APE) share price edges higher on trading update
• ASX 200 down 0.2%: Origin sinks on earnings downgrade, gold miners charge higher
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Sebastian Bowen owns shares of Coca-Cola, McDonalds, and Procter & Gamble. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Unilever. The Motley Fool Australia owns shares of COLESGROUP DEF SET, iShares Global Consumer Staples ETF, Transurban Group, and Woolworths Limited. The Motley Fool Australia has recommended Magellan Infrastructure Fund. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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